Karachi, June 16, 2025 – The Pakistani rupee weakened against the US dollar on Monday, closing at PKR 283.17 in the interbank market, down by 21 paisas from the previous session’s closing of PKR 282.96.
The decline reflects growing pressure on the rupee amid end-of-quarter payment demands and escalating geopolitical tensions.
Currency dealers attributed the rupee’s depreciation primarily to increased dollar demand from importers and corporates as the June quarter draws to a close. The need to settle outstanding payments has significantly raised the outflow of dollars, weighing heavily on the rupee.
The broader geopolitical backdrop has also contributed to the currency movement. The intensifying conflict between Israel and Iran has led to volatility across global markets, particularly in commodities. Crude oil prices have surged, stoking concerns about supply disruptions. For oil-importing countries like Pakistan, this poses a substantial economic challenge, as rising petroleum costs translate into a higher import bill in dollar terms — putting additional pressure on the rupee.
Despite positive developments in Pakistan’s external sector, including strong growth in workers’ remittances and increasing foreign exchange reserves, these gains have been overshadowed by global uncertainty. The dollar’s strength continues to dominate currency markets as investors turn to safe-haven assets, limiting the rupee’s ability to stabilize.
According to the State Bank of Pakistan (SBP), remittances rose sharply to $34.9 billion during July–May FY25, a 28.8% increase from the same period last year. In May alone, Pakistan received $3.7 billion in remittances, showing a 16% rise over April and a 13.7% increase year-on-year. These inflows have played a key role in supporting the rupee by boosting dollar liquidity.
In addition, Pakistan’s foreign exchange reserves increased by $277 million during the week ending June 6, reaching a total of $16.875 billion. Of this, reserves held by the SBP stood at $11.676 billion, up from $11.509 billion the previous week. This uptick suggests that the central bank is well-positioned to manage exchange rate volatility and maintain dollar supply in the market.
Nonetheless, the rupee’s short-term outlook remains uncertain. With geopolitical risks still looming and oil prices fluctuating, further movement in the dollar-rupee parity is likely. Market participants will be closely watching international developments and local economic indicators to assess the future trajectory of the rupee.